By Seun Ibiyemi
Nigeria’s outstanding debt securities increased by 14.47 per cent to N175.46 trillion in 2025 as the Federal Government intensified borrowing to finance budget deficits, according to the latest Annual Report released by the Central Bank of Nigeria.
The report showed that total debt securities rose by N22.13 trillion from N153.28 trillion recorded in 2024, reflecting the government’s increased financing requirements and investors’ growing appetite for debt instruments amid attractive market yields.
According to the apex bank, the rise in debt securities was driven by heightened fiscal financing needs, while investors continued to favour treasury instruments over conventional lending because of higher returns.
Despite the overall increase in public debt instruments, the CBN’s claims on the Federal Government through debt securities declined by N348.58 billion, or 1.3 per cent, to N26.40 trillion, from N26.74 trillion in the previous year.
The bank attributed the decline mainly to lower domestic claims on the Federal Government following a reduction in Ways and Means advances.
Similarly, the CBN’s holdings of foreign debt securities fell by N303.62 billion, representing a 1.85 per cent decline, to N16.08 trillion, which the report linked to weaker foreign investment inflows and portfolio rebalancing.
Debt securities issued by Other Depository Corporations (ODCs) also dropped sharply by 42.2 per cent to N10.56 billion, as investors redirected funds into Federal Government bonds and treasury bills amid elevated interest rates.
However, ODCs increased their investments in Federal Government debt instruments by N2.24 trillion, representing a 12.5 per cent increase, raising total holdings to N20.15 trillion during the review period.
The CBN further disclosed that Nigeria’s total public debt stood at N153.29 trillion as of September 2025, representing 35.55 per cent of Gross Domestic Product (GDP), remaining below Nigeria’s self-imposed 60 per cent debt ceiling and the 70 per cent benchmark commonly referenced for market-access economies.
On the fiscal side, the report highlighted a significant improvement in government revenue performance, with federally collected revenue rising by 33.67 per cent to N36.08 trillion in 2025.
The growth was attributed to stronger collections from both oil and non-oil sources, particularly Value Added Tax (VAT), Companies Income Tax (CIT), Petroleum Profit Tax (PPT) and oil royalties, supported by improved tax administration and stronger compliance.
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Non-oil revenue contributed N23.35 trillion, accounting for 64.71 per cent of total federally collected revenue, while oil revenue nearly doubled to N12.73 trillion, driven by higher remittances from Nigerian National Petroleum Company Limited and improved petroleum tax receipts.
After statutory deductions of N15.78 trillion, distributable revenue under the Federation Account stood at N21.94 trillion, boosted by exchange rate gains, excess non-oil revenue and excess oil revenue.
The Federal Government received N7.57 trillion from the distributable pool, while states shared N7.38 trillion and local governments received N5.40 trillion. Oil-producing states also received N1.59 trillion as 13 per cent derivation revenue.
Among the states, Lagos received the highest federation allocation at N720.50 billion, followed by Delta, Akwa Ibom, Rivers and Bayelsa. Nasarawa received the least allocation, with Ekiti, Ebonyi, Gombe and Taraba also ranking among the lowest recipients.
The CBN noted that tax revenue remained the mainstay of government finances, contributing N32.06 trillion, or 88.87 per cent, of total federally collected revenue, while non-tax revenue declined significantly during the year.
The report underscores the Federal Government’s increasing reliance on the domestic debt market to finance fiscal deficits, even as stronger revenue collections helped improve distributable earnings across the three tiers of government.
